College tuition soars as states reduce funding

Anthony Carnevale, a leading labor economist, is director and research professor of the Georgetown University Center on Education and the Workforce.

We can no longer tolerate an achievement gap, because it will become an increasing economic gap. Do we want an economy based on $9-an-hour consumers and workers?—Anthony Carnevale

Growing enrollments and declining state budgets have been putting the squeeze on colleges and universities for the past 25 years, but the problem got a lot worse last year, says a new report from the State Higher Education Executive Officers Association.

That's bad news for college students and their families, because it falls to them to make up the difference. The percentage of college costs supported by tuition has climbed steadily from 23 percent in 1987 to 47 percent in 2012. Average tuition rates in the U.S. climbed a record 8.3 percent last year.

The vise grip is worse for Utah schools, where money from the state declined by 26.6 percent since 1987, more than at the majority of schools around the nation. The national average for declines in state funding for higher education is 23.1 percent.

At the University of Utah, full-time student enrollment went up from 23,306 in fall of 2007 to 27,164 in fall of 2012. Over the same period, state education funding to the U. declined from a high of $227.8 million in 2008-09 to $197.8 million for this academic year. Predictably, annual tuition rose by roughly $3,000 over the same five years.

Searching for answers

The pain of rising college costs extends far beyond the pinch it puts on student pocketbooks.

Public colleges and universities in the United States enroll more than 70 percent of all post-secondary students, according to a statement from the State Higher Education Executive Officers Association. The accessibility and quality of public schools will determine the competitiveness of the U.S. workforce for the next half century, the statement said.

The group calls for colleges and universities to reduce costs and time to a degree, improve teaching, and increase the number of students who graduate ready for the workplace. Discussion about those very thoughts has increased among education watchdogs since President Barack Obama brought them up in his recent State of the Union address.

The president said he wants to prompt colleges to keep costs in line by shifting federal grants and loans away from schools that fail to keep tuition down and instead funnel that money to schools that serve needy students well — changes that would leverage $10 billion annually to keep tuition down, according to a White House fact sheet.

The $170 billion spent each year on federal aid to higher education is "a huge potential lever" for making sure colleges work as hard at graduating students as they do in recruiting them, said Amy Laitinen, deputy director for higher education at the New America Foundation.

"Access to a college education is important, but it needs to be access to education with a degree that means something — without a sack-load of debt that is crushing people on a day-to-day basis," Laitinen said.

Labor economist Anthony Carnevale, director of Georgetown University's Center of Education and the Workforce, also likes the idea of using federal money to drive down costs. But Carnevale said it will take more than that to reform higher education. Colleges will have to find ways to do their work more efficiently, and at lower cost.

Technology is one answer to educating more people for less money, he said. It's a revolution already underway, as the growth of online schools shows. Narrowing the gap in educational performance between privileged and disadvantaged students is another area in which smart use of technology can help, said Bob Wise, former governor of Virginia and president of the Alliance for Excellent Education.

Interactive software can allow students to move at individual paces, and learn concepts they've missed over the years. It provides data to teachers about each student's strengths and weaknesses so instruction can be tailored, Wise said. And, it allows K-12 schools and colleges to move toward basing credits on competency instead of seat time, he said.

Economic imperatives

As students are saddled with an ever-greater portion of higher education's cost, student populations at four-year schools are shifting rapidly toward white, affluent students, Carnevale said, and there's a parallel shift at two-year schools toward student populations of lower-income, working class students — a high percentage of them black or Latino.

Helping those kids get to college is more than a moral imperative — it's an economic necessity, Wise said.

"Today, in 12 states, over half of students are children of color or ethnicity, and in ten other states, they are 40 to 49 percent," he said. "We can no longer tolerate an achievement gap, because it will become an increasing economic gap. Do we want an economy based on $9-an-hour consumers and workers?"

One glimmer of hope for students trying to save money can be found in the bi-partisan push toward greater transparency about costs and graduation rates. And there is hope that consumers will soon be able to access clear information about what happens to students after they graduate from a particular school — whether they find jobs, and at what salaries.

This is something President Obama called for during his Feb. 12, State of the Union address, and the White House posted an online College Scorecard of comparison data for higher education institutions the following day — a move greeted by a rare moment of bi-partisan approval.

Requiring accountability

Along with politicians on both sides of the aisle, the president wants to provide data to help families choose colleges on the basis of tuition costs, graduation rates and potential earnings. The online College Scorecard shows costs and graduation rates for most public colleges and universities. Information about how well schools do at preparing their students for the job market, and what kinds of wages graduates make, might be coming soon.

Laitinen said federal efforts toward transparency and accountability have centered on K-12 education and that focus on higher education is overdue.

"Everyone is told you have to get a college degree and that it's an economic imperative to stay in the middle class," Laitinen said. "That’s right, overall — college is a great return on investment — overall. But at which school? Which program? Which price? Republican and Democratic leaders are asking what students are getting. We don't know. Students don't know when they sign up."

Few Americans realize that four-year college completion rates hover between an "atrocious" 25 and 30 percent nationally, depending on how they are figured, Laitinen said. High schools with low graduation rates are labeled as "dropout factories" targeted for transformation, but there has been little accountability for higher education institutions that graduate too few students, she said.

Carnevale likes the scorecard, but said it should include information about the employment picture for various degree programs, not just schools. He approves of new laws that require for-profit post-secondary schools to track information on how their students do at getting jobs after graduation, and thinks public colleges and universities should have similar accountability requirements.

It's an idea supported by the bi-partisan team of Sen. Marco Rubio, (R., Fla.) and Sen. Ron Wyden, (D, Ore.) who are trying to push such a law through Congress.

Handle with care

The State Higher Education Executive Officers Association cautioned that efforts to improve higher education must be applied with care.

It's important not to over-estimate how many students schools can educate with their existing resources and about the cost-saving potential of technological methods for teaching, the group said in a statement that accompanied the report. And it is important for affluent Americans to realize that the nation's economy will suffer if educational opportunities are limited for some, even if their own families are well-educated, the statement continued.

State and local funding for higher education, net tuition, and enrollment trends were analyzed to arrive at the report's conclusions.